Paschal Onyemaechi: How Nigeria Can Develop Better Housing Policy Framework

Nigeria has about 14 million housing deficits, with the low-income earners constituting the major part.  In the light of this development, Dr. Paschal Onyemaechi, an author and financial economist, with research interest is public-private partnership, low-income housing  and urban development, discusses how Nigeria can develop a better housing framework policy among other sundry matters, with select journalists. Olaoluwakitan Babatunde was there

What motivated you to write your new book?

The publication is part of the findings of my recently concluded doctoral research. The essence of a doctoral research is to contribute to knowledge and fill a gap that will better human existence. Now, if you do a PhD and decide to keep the thesis on the shelve, that is not good enough. You have to disseminate the knowledge and the contribution the study has made. This is why I decided to publish the model developed by my study. In this case, the study developed a model for the successful implementation of public-private partnership – PPP in housing and urban development for low-income groups  in developing countries like Nigeria. Again, I am passionate about it because the model developed will make a significant contribution in addressing the housing deficit in Nigeria, especially for the poorer groups in the informal sector

 The model is a pro-poor PPP framework built to work on a home micro-finance (HMF)  scheme aimed at the low-income group, the urban poor and the poorer groups in the informal sector. The home micro-finance will assist those in the informal sector who are informally employed to formally save so that they can formally borrow to acquire a house or improve their houses in the informal environment. The new pro-poor PPP framework have expanded the partnerships to multiple partners including the third sector. This is to guarantee affordability to those at the bottom of the income ladder. This is very critical for any meaningful solution to the housing challenge faced by the low-income and urban poor in Nigeria. Under the new thinking, the source of funding for this model is equity  (not debt). This is the key financial solution. Of course, its not that the present practice does not produce houses, it does, but at what cost per unit and affordable to who? Another critical area the new model has addressed aside affordability, focus group and source of funding, is project  hijack and profiteering by the business class. Under  the model,  there are no profit for rentage or property re-sale. The rest you will read up when the book is presented on the 25th of February.

How will you describe the housing situation in Nigeria?

The housing situation in Nigeria is heading for a crisis if not addressed. I say this because available records show that Nigeria has about 14 million housing deficit; this is very high. The low-income constitute large percentage of the deficit.  So, majority of low-income urban dwellers live in poor housing conditions, with proliferation of slums around the major cities. This has great consequences for the quality of life, standard of living and even the economy of Nigeria.

We should not only measure economic growth, but we should measure standard of living of the people too.  As you know, housing is an important component of human settlement and is ranked second as basic need of man. It is a pre-requisite for the survival of man.  Affordable and adequate housing has a strong link to the need for security and  safety and it is  a significant determinant in the measure of the standard of living and welfare of  citizens of any  nation. Other developing countries like India, Malaysia, Brazil and South Africa have left us behind due to a dynamic and pro-poor housing  and urban development policies they have adopted. But it is not too late to effectively and adequately address the shortfall.

Why has government policies on housing always failed to meet up with housing demands of the masses?

The policies focused on the formal sector, whereas the problem lies in the informal sector. Large percentage of the people with critical housing needs are in the informal sector. The petty trader, the butcher, the tailors, those in informal employment and with irregular income. They have need for housing and even as a right. This is why the deficit figure keeps going up. Again, we must see urbanisation as a positive force that can trigger economic development. And then prepare for it. We shouldn’t say, ‘lets take some basic amenities and agriculture to the villages so that some youths will stay back and not populate our cities.’ No. That have shown not to be effective. Studies have shown that over 90 per cent urbanisation globally occurs in developing countries.  This trend is particularly prevalent in South Asia and sub-Saharan Africa, the two poorest regions of the world. Thirdly, there is a problem with the model being applied both during the government-led approach and the private sector-led approach and the same issues have not been addressed. These problems predate the present administration and even their predecessor. It has been with us for a very long time

Does the Land Use Act pose any challenge?

The Land Use Act is a major challenge, a huge obstacle, it has to be amended. However, the book advocates the activation of some latent laws already in the land use act that can enable us move forward  and progress well while waiting for the amendment. 

 The record of building collapses is high especially in Lagos and Abuja.Why do you think it is happening?

The handiwork of quacks; Nigeria has very good and competent builders and engineers. But when quacks take over any discipline, you know what happens.

How can Nigeria develop a better housing policy?

Good. This is the right question.  I can say that the problem of the  ‘know how’ has been significantly addressed. That is why the new thinking (The Book) started by asking what many experts in the subject matter consider as ‘the right question’.   ‘How can we make millions of poor Nigerians own quality homes without having millions in their pocket?’ The book concluded that for us to achieve this, we have to keep the housing policies and access to housing finance within the reach of the low-income and poorest groups. But that is not the end. It provided a practical roadmap to achieve this. For instance, the model developed from the new thinking has the capacity to generate over 100,000 low-income houses and slum upgrade annually without sweating the budget. I mean without any single financial budgetary allocation from the government. The model generates its own funding. This is why I said this model have challenged all of us and the policymakers in particular. You know, in the existing framework, the government assumes the private developers have the money and wants to invest in PPP housing. However, in many cases  they don’t, they just sign the project and go to the commercial banks to borrow and you know the going market rate and you can imagine what that will produce in terms of the final cost of units of houses produced. This model is a complete departure from all of that. Infact, under the new thinking, the developer only brings in  their expertise to construct the buildings.

Is that the solution to the housing problem?

You are not wrong,  the model has been validated by  notable PPP housing  experts within and outside Nigeria. It is now left for policymakers to implement.

Do you support the merging of the Ministry of Housing with Works and Power?

That  is not a problem. I appreciate the fact that the ministry is big and a huge task to the Minister, however, the current Minister has managed not just a state but the metropolitan city of Lagos. 

So, I think he can deliver power,works and housing excellently if the enabling environment is provided by all stakeholders. The point is that, even when we had a dedicated ministry for housing, did that solve the problem? I think it  is about the right policies, adequate and effective  model and not the size of the ministry.